HC cautions against use of unbridled powers to freeze salary accounts of employees

Shimla, Nov 4

Himachal Pradesh High Court has cautioned investigating agencies and banking authorities against exercising unbridled powers to freeze the entire salary accounts of government employees in cybercrime investigations, holding that indiscriminate restrictions on access to legitimate earnings could violate fundamental rights and deprive individuals of their livelihood.

Justice Sandeep Sharma, while directing the State Bank of India (SBI) to remove a blanket debit freeze from the salary account of a government employee, observed that investigating agencies must exercise requisite care, caution and compassion while issuing directions to freeze bank accounts.

The court made it clear that where the disputed transaction involves an identifiable amount, authorities should explore the possibility of imposing a lien on that particular sum rather than freezing the entire account.

The court was hearing a petition filed by Shiv Singh, a government employee working as a Patwari in Shimla district, whose salary account maintained with SBI’s Ganvi branch in Rampur was completely frozen following communications from cybercrime authorities in Maharashtra.

The petitioner had downloaded an online gaming application, Yono Games, and won money through the platform. An amount of Rs 21,000 was credited to his salary account on July 9, 2026, through a digital payment gateway. Subsequently, the entire account was frozen in connection with two cybercrime complaints originating from Thane in Maharashtra and Malkajgiri in Telangana.

The petitioner maintained that he had no knowledge of any fraudulent transaction and was merely a recipient of the amount credited through the gaming application.

However, the blanket debit freeze deprived him of access to his monthly salary and savings, affecting his ability to meet household expenses, children’s educational requirements, medical bills, house rent and bank loan instalments.

The court observed that the investigating agency had not alleged that the petitioner was a suspect or accused in the cybercrime. He could possibly have been an unintended beneficiary of a transaction involving cheated money and might not even be connected with the offence under investigation.

Justice Sharma observed that freezing an individual’s entire bank account has serious implications and encroaches upon his right to earn and live with dignity. The investigating agency, before passing such a blanket order, is expected to issue a show-cause notice and assign reasons for freezing the entire account.

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The court further observed that if investigating agencies are permitted to issue blanket freezing orders without assigning reasons, it could play havoc with the financial circumstances of account holders. It emphasised that a lien on the disputed amount, wherever identifiable, should be explored as a more appropriate interim measure.

Referring to judgments of the Delhi High Court in Pawan Kumar Rai versus Union of India* and the Kerala High Court in Dr. Sajir versus Reserve Bank of India, the court reiterated that freezing an entire account cannot be justified merely because a specific amount suspected to be connected with cybercrime has been credited to it.

The High Court held that the complete debit freeze violated the petitioner’s fundamental rights under Articles 14, 19(1)(g) and 21 of the Constitution, particularly when no opportunity of hearing had been provided before or after the freezing action.

Allowing the petition, the court directed SBI to immediately remove the complete debit freeze from the petitioner’s salary account while retaining a lien only on the disputed amount of Rs 21,000, which remains subject to the ongoing investigation. The bank’s counsel was directed to communicate the order to the concerned branch for immediate compliance.

The ruling in CWP No. 19484 of 2026 was delivered on October 30, 2026, by Justice Sandeep Sharma.

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